A drop in government subsidies for renewable energy projects has resulted in the lowest level of growth in this area in years. These small-scale projects, owned by farmers, land-owners and communities have proved to be a powerful resource for energy generation. Currently, these projects generate almost 10% of the UK’s energy mix and are capable of powering well over eight million homes.
Thanks to the growth in this sector, the UK saw its greenest year ever in 2017. The UK went several days without using coal power – a first since the industrial revolution. This shows the impact of investment in solid renewable energy projects.
Yet, in 2017, £227 million was spent on independent renewable energy projects – this compared with £280 million in the previous year and a staggering £418 million in 2014. This steep decline in support for these projects comes in the wake of the government’s decision to end feed-in tariffs. This was a scheme that aimed to support the development of small-scale renewable energy generation.
The scheme enabled those hoping to build a renewable energy source, such as a wind turbine or solar array, to rely on payments from energy companies for electricity generation. The feed-in tariff scheme is set to end in March 2019 and the government has not announced a review date.
Last year, the government also announced the closure of the Renewable Obligation Scheme for new projects. This scheme encouraged generation of energy from renewable sources by making sure energy companies were acquiring a proportion of their electricity from renewable energy sources.
The Vice President of Renewables at Smartest Energy explained: “The reduction in subsidies has inevitably slowed growth in the independent generation sector but these latest figures underline the significant role energy entrepreneurs continue to play as the UK shifts to a decentralised, decarbonised and digitised energy system.”
Unfortunately, due to the shift in the financial landscape, the prediction for the future is that new renewable energy projects that can operate subsidy-free will be the exception, not the norm.
However, Robertson also noted that the number of future projects will most likely pick up again. Aurora Energy Research produced a report that forecasts a large number of subsidy-free projects being built by 2030. The report highlighted the importance of improving battery storage of electricity, saying it could lead to £20 billion in UK investment in the next 12 years.
Dr. Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit, explained that while we still see growth in independent renewables, we can be satisfied that the health of the sector is good. He said that despite the drop in government support, independent investment shows that the industry powers that be want to push on with the development of the sector.
Marshall went on to say: “Following the recent announcement that the UK carbon targets could be tightened later this year, measures that curtail the generation of low-carbon power seem out of step with our long term goals. Without a cheap and clean power supply, plans to cut carbon from heating and transport are likely to be harder to achieve, and risk undermining claims of climate leadership that British ministers have been making on both the domestic and global stage.”
A spokesperson for the government department for energy has attempted to reassure by saying that the team will be reconsidering how best to support small-scale energy projects after the 2019 expiration date.